Here was the problem, according to the article.
Like Apple's service(which is licensed), Mp3.com's unlicensed service did not ask users to upload all the tracks. If it already had a track with the same fingerprint somewhere on its servers, it would just copy and save the user the time/bandwidth of the upload.
That was the legal snafu that got them in trouble, for some reason. Even though it's functionally identical to having the user upload every single track, the court wants the service to keep a unique, individual copy of every track the user owns. It's kind of absurd, because this means the service will have to store millions of copies of the same song.
Google does this already. They store millions of extra tracks. That's why they feel like they can win the legal case.